Last month, a Director from one of C2’s federal contracting clients called to discuss a conversation she had just had with one of the company’s employees – “John.” John is a U.S. born citizen who practices traditional Islam.  He often wears traditional Islamic clothing, and it is known among his co-workers that he participates in Ramadan.   John is a talented Web Developer who brings fresh, new ideas to his customers. When asked one day by a co-worker why he sits alone in the lunch room and never participates in the informal out-of-office socials, John confided that he is never invited to lunch or to the socials (which are employee driven, and not sponsored by the company).  He also shared that he has overheard some co-workers referring to him as a terrorist, or “Mr. T” for short.

According to our client, her conversation with John occurred because the isolation and narrowmindedness of John’s co-workers has pushed him to look for another job as he does not feel a part of the team. John simply did not want to continue working in an environment where he feels socially excluded.

A.        Are Federal Contractors Required to Strive for “Diversity”?

Some say “the world is getting smaller” as evidenced by an increasingly diverse workforce.   Certainly now more than ever, the American workforce is replete with people of varying ethnicities, races, religions, origins, genders, and lifestyles.  While employee diversity brings different ideas, ideologies and experiences to bear upon the company’s business, those same differences can sometimes lead to friction among co-workers.

Unlike private sector companies, federal contractors have an obligation to strive toward “diversity,” although it is not termed as such.  Executive Order 11246 prohibits federal contractors with $10k or more in contracts (or subcontracts) from discriminating against their employees on the basis of race, color, religion, sex, or national origin.  For contractors with over $15k in contracts, they must comply with section 503(b) of the Rehabilitation Act by not discriminating against employees with disabilities.  And contractors with over $100k in contracts must additionally commit to not discriminating against military veterans, pursuant to the The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”).

In addition to these basic non-discriminating requirements, federal contractors with fifty (50) or more employees who hold contracts in excess of $50k must annually create an affirmative action plan, which outlines how “diverse” a contractor’s workforce is and whether it needs to take “affirmative action” to recruit candidates of various racial, gender, disability, and ethnic backgrounds in order to make its workforce match (roughly speaking) the diversity that exists in the community at large where the contractor does business.  Contractors with contracts in excess of $100k must also include veterans in its affirmative action plan.

So, the short answer is “yes.”  Contractors have a unique obligation to create a diverse work environment.  While affirmative action plans do not have to be delivered to any specific agency, they must be prepared annually and kept by the employer in its files in case of an audit by the Office of Federal Contract Compliance Programs (“OFCCP”).

B.        The Benefits of Diversity

“Diversity can be defined as acknowledging, understanding, accepting, and valuing differences among people with respect to age, class, race, ethnicity, gender, disabilities, etc. (Esty et al. 1995).”

Employing people from different backgrounds and experiences can often create a more creative, innovative, and productive workforce, which may result in more business success for the company. As such, businesses today are being encouraged to foster diversity.

Over the past few decades, globalization has taken hold in the U.S. Defined as “the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture,” globalization is increasing due in large part to advancements in communications tools, such as the internet, cell phones, and the increasing ease of international travel.   The Center for American Progress has identified ten (10) Top Economic Facts of Diversity in the Workplace which may encourage companies to see diversity as a way to increase their bottom line:

  1. A diverse workforce drives economic growth, as the number of people in the workforce grows;
  2. A diverse workforce captures a greater share of the consumer market by bringing individuals from different backgrounds and experiences and expanding the customer base;
  3. Recruiting from a diverse pool of candidates means a more qualified workforce. When companies recruit from a diverse set of potential employees, they are more likely to hire the best and the brightest in the labor market;
  4. A diverse and inclusive workforce helps businesses avoid employee turnover costs due to employee unhappiness;
  5. Diversity fosters a more creative and innovative workforce. Bringing together workers with different qualifications, backgrounds, and experiences are all key to effective problem-solving on the job;
  6. Businesses need to adapt to our nation’s changing population to be competitive in the economic market;
  7. Diversity is a key aspect of entrepreneurialism;
  8. Diversity in business ownership, particularly among women of color, is a key to moving our economy forward;
  9. Diversity in the workplace is necessary to create a competitive economy in a globalized world; and
  10. Diversity in the boardroom is needed to leverage a company’s full potential.

Importantly, diversity is not limited to a difference in cultures, it also includes a workforce of differing ages, ideologies, and generational norms (e.g., baby boomers vs. Millennials).  Each group views the workforce uniquely. While these differences of ideologies and backgrounds can positively impact a company, there may be a need for the employees and managers to make adjustments or to accept changes to their work environment that foster inclusion and welcome differences among employees.

C.        The Challenge Facing Employers

In order for diversity to be successful, business owners and leaders must create work environments that encourage mutual respect and acknowledge that individual differences can be an inherent strength.  By contrast, when companies fail to embrace diversity, their reputations can suffer (among prospective employees, as well as clients), and their working environments permeated with tension and distrust (Recall, that is exactly why our client’s employee, John, wanted to look for a new job).

There are challenges to creating and managing a diverse workforce.   Generally speaking, most people resist change because they do like the unfamiliar. Negative attitudes toward change can be barriers to organizational diversity, can harm working relationships and damage morale and work productivity, and even lead to discrimination lawsuits. Negative attitudes about diversity can manifest themselves in a variety of ways, ranging from outright prejudice, to more subtle forms of resistance that include stereotyping, exclusion, unfriendliness, or unfavorable work assignments.

Companies should not expect changes in their work environment will go unnoticed by employees or that everybody will automatically adapt to the changes.  To combat people’s “change adverse” nature, it is important that companies train their managers on the importance of diversity (along with emphasizing the importance of not discriminating against employees).  Similarly, companies should strive to educate all employees (not just managers) about the business benefits of diversity and the legal importance of working harmoniously with co-workers of various backgrounds.  Part-and-parcel of this process for the company is to try and ensure that employees of diverse backgrounds are being accepted by their co-workers and integrating socially into the company’s culture.  Workplaces today are increasingly made up of diverse cultures, so organizations should be proactive and help their employees adapt to ensure the organizations’ continued success.  Getting employees to focus less on individual differences and focus more on the shared goal of the company’s overall success can sometimes be challenging, but is a goal worth striving toward.

D.        Takeaway for Employers

Returning to our client’s employee, John, we were able to assist the client in creating a diversity training program for both its managers and employees.  The client’s Director also had a one-on-one sit down with John to discuss his concerns and reassured John that he was a valued member of the team, urged him to bring any future concerns directly to her, and asked John to give the company a chance to demonstrate that it was committed to ensuring the work environment embraced all of its employees equally.

If your company has not devoted attention to the diverse nature of your workforce, now is a good time to start.  As a first step, formulate your company’s strategy for diversity; by implementing the steps below:

  • Begin understanding the value of diversity as bringing a competitive advantage whether nationally and internationally;
  • Enhance your business processes by encouraging diversity in recruiting, recognition and retention strategies;
  • identify the bottom-line impact of a diverse workforce whether through increased market share or broadened ideas that grow the business; and
  • Build and strengthen relationships with minority stakeholders and other organizations by generating competitive sourcing opportunities and business development in other markets beyond your normal business model.

Please contact a C2 representative if you would like additional information on diversity in the workplace to include training.

C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only.